June 28, 2007
Illinois
Illinois
GALESBURG – Local landowners and officials find that taxes are the taxing issue for a future Knox County wind farm.
Taxes are a concern in two ways: The challenge for local officials is how to value wind turbines for tax purposes. How the tax bill is paid is a concern for landowners, who don’t want to pay the taxes for the turbines, which cost $1.6 million each, said Michael Arndt, development manager for Invenergy. The Chicago-based company plans to build 266 turbines in Knox County.
Ideally, the turbine and its access road, which are under easement, would have a separate tax parcel number and the tax bill would be sent to the wind energy company. The reality is the landowner still owns the land and easements never have been taxed separately in Knox County.
“From my perspective, that’s a real deal killer,” said Mike Gibbons, whose wife’s family could put an estimated six turbines on their land.
Mike said he otherwise is behind the project 110 percent. If the state provides some legal tax protection for landowners, he and wife Teresa would advise the family to participate with its 520 acres of land. If not, they would be reluctant.
The Gibbons family was among 100 people Tuesday night to attend an Invenergy wind energy forum hosted by the Knox County Farm Bureau at the Knox Agri Center in Galesburg. The company presented project facts and spent more than an hour answering audience questions, most of which pertained to taxes.
Local officials and Invenergy representatives said solving the tax issue comes down to the state, which has yet to act on legislation that would provide a uniform assessment of wind turbines and create separate tax parcels for the turbines.
The county assessor’s office first is dealing with how to assess the value of wind turbines.
“We’re waiting to see what the state is going to decide,” said Chris Gray, chief deputy in the Knox County Supervisor of Assessments office. She attended the forum in place of supervisor Joyce Skinner, who is on vacation.
If legislation is not passed before turbines are built here, Gray assumed the county would work with neighboring counties to determine value.
As far as tax bills, Gray said separating the tax for the turbine and access road from the rest of the land is possible, but the county has not researched it. If the taxes are not separated, landowners will have to pay, whether or not they are reimbursed by the wind company.
Invenergy says it will reimburse the taxes to the landowner, as stated in the contract. Audience members voiced concerns about prompt payment. Arndt said it was in the company’s best interest to pay before the tax bill is due or it would be in default, which would result in removing the turbine.
Briefly: Local Wind
Invenergy is one of three groups publicly talking about developing up to 650 wind turbines in a 30-mile radius of Galesburg. The projects in all are valued at just under $2 billion.
Invenergy’s Knox County wind farm, called Pilot Knob Wind Energy Center, would include 266 turbines in Knox County north of a line from Galesburg to the northeastern corner of the county. It would be completed in phases, eventually generating enough electricity for 133,000 typical homes. Over time, the potential investment would be around $800 million in Knox County.
Financial benefits are the primary driver for landowners to sign easements or leases with wind farm developers. The industry is paying between $4,000 and $8,000 per turbine annually to landowners.
Open land, adequate wind and a transmission infrastructure are attracting projects in this area of the state, while the wind industry’s growth is largely fueled by government incentives, according to the American Wind Energy Association. Wind companies plan to sell the electricity to utilities, such as Ameren and Commonwealth Edison.
Pilot Knob Wind Energy Center
Size: 266 turbines, 400 megawatts
Where: northern Knox County
Cost: $800 million
Status: Invenergy needs to acquire easements on at least 25,000 more acres of land. Studies also are ongoing.
Timeline: Acquire all easements, permits and approvals this year. Begin construction in 2009. Start operating in 2009-2010.
Nearby project: The company also is building the Bishop Hill Wind Energy Project, which is the same size in southern Henry County. Turbines there already have been permitted.
Turbine stats:
1.5 megawatt turbines
Reach 405 feet at the blade’s peak
Structure and access road occupy about one-third of an acre
About one turbine placed per 80 acres
Wednesday, June 27, 2007
By JOANIE STIERS
The Register-Mail
URL to article: https://www.wind-watch.org/news/2007/06/28/wind-farm-tax-liability-worries-landowners/